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3 Reasons Whistleblowers Are Your Company's Best Friends

Treated properly, whistleblowers can save you time and money.
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Whistleblowers get bad press. Presented as cranky, disturbed individuals bearing a grudge, they're easily demonized and excluded. But in March, the U.S. Supreme Court decided that the whistleblower protection afforded by Sarbanes-Oxley now applies to employees of contractors and subcontractors of publicly traded companies.

That could mean you. At a stroke, the legislation went from covering 5,000 public companies to affecting six million private ones. So it pays to understand who whistleblowers are and how to handle them.

1. Whistleblowers don't want to go public.

Most whistleblowers are among your most dedicated employees. They're generally loyal, dedicated, and committed to the higher mission your organization serves. They become upset and confused if or when they see (or think they see) those higher values being ignored or willfully undermined. But they don't start out wanting their grievances to be publicized; they want them to be fixed.

Sherron Watkins, the so-called Enron whistleblower, did not choose to go public. She articulated her concerns in a carefully worded private letter to chairman Kenneth Lay, expecting and hoping that he could fix the company before it collapsed. That letter became public knowledge only afterward, during the Senate investigation. Had she written sooner, had he had the courage to do more than try to fire her, the story might have ended differently.

2. Whistleblowers are your best early-warning system.

Treated appropriately, whistleblowers can alert you to problems early--when it's cheap and easy to fix them. Almost every major business calamity can be found, afterward, to have been preceded by lots of early tremors: small mistakes or failures that presaged the bigger problem to come. Individuals with the courage and integrity to articulate and communicate problems are the best early-warning system you have. They could save you huge difficulty and cost later.

3. Whistleblowers need a safe space to speak.

Research into organizational silence suggests that the overwhelming majority of employees who have issues and concerns at work will not speak up. They could, they should, but they won't--largely out of fear (real or imagined) of retaliation from their supervisor or co-workers. That means every company needs to put in place processes that make it safe and easy for individuals to articulate their concerns.

The Body Shop did this in a brilliantly simple way. At orientation, all new employees were given a red envelope. Should they see or know of anything at work that worried them, they were told to write it down, sign the note if they wished to, and put it into the red envelope and the envelope in the internal mail system. The CEO promised to read it. The process was easy and cheap, and it was used. The notes were always about serious issues and almost always signed.

Many people think whistleblowers are an HR issue. I don't. Dealing with concerned employees is a leadership issue. One of the single hardest parts of running a company is knowing what's going on. Given that most people see speaking up as a risk, it's rare that anyone takes that risk without good reason. Treated properly, whistleblowers could be your new best friends.

Last updated: May 21, 2014

MARGARET HEFFERNAN

Margaret Heffernan is an entrepreneur and author. She has been chief executive of InfoMation Corporation, ZineZone Corporation, and iCAST Corporation. In 2014, she published her fourth book, A Bigger Prize: How We Can Do Better Than the Competition.




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